The global sourcing of business services: evidence from the offshoring research network survey

This article provides a statistical investigation aimed at gaining further understanding of the phenomenon of global sourcing of business services, which has been subject to an impressive growth in the last fifteen years. The Offshoring Research Network has started to investigate this phenomenon in 2004, and it has surveyed more than four thousand global sourcing ventures up to 2011. Evidence shows that value-added and knowledge-based activities such as R&D, engineering and product design are increasingly offshored, and that firms prefer captive rather than outsourcing governance modes when involving these business functions. European companies show a slight preference for captive solutions, while US and Canadian companies are more likely to adopt outsourcing solutions. India is the main recipient, hosting almost 40% of the offshoring initiatives, probably because it offers not only low cost skilled labour but also qualified service providers, given that it is targeted mainly through the outsourcing governance mode. Finally, the main drivers appear to be cost-savings and access to qualified personnel, while captive governance mode seems to be more performing than outsourcing in achieving both savings and high quality standard